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Lawmakers Press Expansions to PPP

Lawmakers Press Expansions to PPP

Top Congressional tax writers sent a letter to Treasury Secretary Mnuchin urging his Department to allow businesses to deduct expenses associated with Paycheck Protection Program (PPP) loans that are ultimately forgiven. This letter comes after the Internal Revenue Service determined that those expenses are not deductible. Additionally, a bipartisan group of 19 senators sent Secretary Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza a letter urging them to permit recipients of PPP loans to spend more of the loan funds on nonpayroll expenses without penalty. A PPP loan can be converted to a grant if at least 75 percent of it is used to keep employees on payroll; the Senators asked Treasury and SBA to reduce the threshold to 50 percent to accommodate the high cost of rent, mortgage, and utility payments.

Democrat Congressmen Target Oil and Gas in Coronavirus Relief

Last week, Reps. Nannette Barragan (D-CA), Pramila Jaypal (D-WA), Jared Huffman (D-CA), and Ilhan Omar (D-MN) introduced legislation to prohibit oil and gas companies from partaking in any coronavirus relief programs, including the PPP. It also specifically bars fossil fuel companies from accessing the Federal Reserve’s Main Street lending program and locks the Strategic Petroleum Reserve (SPR) at its current capacity of 713.5 million barrels. Moreover, the legislation bars any financial institutions that participate in any relief packages from making new investments in oil and gas projects for two years.

On the other hand, three dozen oil-state Republicans sent a letter to the White House last week urging the President to prevent the nation’s largest banks and investors from discriminating against oil and gas companies. The letter specifically requests that the President block access to any programs and benefits from the coronavirus relief packages to financial institutions that refuse to lend to the industry. The letter was led by Sens. Dan Sullivan (R-AK), and Kevin Cramer (R-ND) and Reps. Don Young (R-AK) and Liz Cheney (R-WY).

Republicans Unsure How to Proceed on Aid for Oil Industry

Senate Energy and Natural Resources Chair Lisa Murkowski (R-AK) said she’s “working all angles” to help the oil and gas industry, but she’s not expecting the federal government to specifically create an aid program for the industry. She iterated that she is wary of imposing tariffs on foreign oil or blocking deliveries from dozens of oil tankers off the California coast. Instead, she’s been working diplomatic channels, including pressing other countries to fill their strategic petroleum reserves and monitoring the production cut agreement between Russia and Saudi Arabia.

At the same time, the White House is struggling to find a way to aid the oil and gas industry without going through Congress. After the Federal Reserve expanded access to its Main Street lending program, the White House insists that it hasn’t closed the door to more aid, but few if any administrative measures remain outside of tariffs, which the President has appeared less inclined to pursue after the Saudis and the Russians agreed to cut production.